El Salvador: End of Legal Dispute with Enel Green Power

The settlement was made through the purchase of the Salvadoran Government for $280 million stake in geothermal LaGeo which owns the Italian company.

Wednesday, September 16, 2015

From a statement issued by the Executive Hydroelectric Commission of the Lempa River:

While in El Salvador preparations are being made to celebrate the country's independence, in Washington representatives of the Salvadoran government and the Italian company ENEL GREEN POWER are putting and an end to a long running dispute. The agreement allows the Salvadoran State to recover the total shares of LaGeo that had been held by the Italian company.

Both the negotiation and ratification of the agreement took place in Washington, at the headquarters of the International Centre for Settlement of Investment Disputes, ICSID. The Salvadoran state was represented by the Attorney General's Office, the Secretary for Legislative and Legal Matters of the Presidency and the President of CEL Group.



More on this topic

El Salvador Nationalizes Geothermal Station LaGeo

December 2014

The Italian company Enel Green Power will be selling its stake in the geothermal electricity station LaGeo, which could end to the dispute between the company and the Salvadoran government.

As outlined in an article on Laprensagrafica.com, a transfer of the 36.2% stake belonging to Enel has been valued at $280 million, payable via a trust based on the future flows from LaGeo, an instrument which must be operational before December 15th, 2014. This trust will be later extended to $480 million, a figure that casts doubts on the total price of the Enel shares.

LaGeo Litigation Continues

January 2013

After the last judgment which was unfavorable to El Salvador, officials have announced the continuation of the legal battle against Enel.

Representatives from the Executive Hydroelectric Commission of the Lempa River (CEL) reported that they will abide by the decision of the Parisian Court of Appeals which means that the Italian company ENEL can capitalize the geothermal company LaGeo and become the majority shareholder in the company.

Dispute Over Geothermal La Geo Heats Up Again

March 2012

Two Salvadoran government agencies are insisting on not giving the majority shares in the La Geo generator to Italy's Enel, despite a court of international arbitration ruling against them.

Inversiones Energéticas (INE) and Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL) have again refused to give the Italian company Enel Green Power a majority stake in the geothermal company La Geo, despite a ruling by an international body against them.

El Salvador: LaGeo Case Affecting Country's Image

August 2011

The dispute between the Italian company Enel and the CEL and INE commissions has sent a negative message to foreign investors.

In the opinion of experts, the fact that by the Ente Nazionale per l'Energia elettrica (Enel) and the Lempa River Hydroelectric Executive (CEL) are going through an arbitration process in order to decide who gets majority control of the geothermal plant, could be affecting the country’s attractiveness in terms of foreign investment.

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